Sandoz Declines To Confirm Plans To Set Up New HQ In Western China
This article was originally published in PharmAsia News
Executive Summary
HONG KONG - Novartis subsidiary Sandoz, a generic drug manufacturer, is keeping secret any plans it might have to expand its presence in China with a new headquarters and a joint venture deal
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HONG KONG - Novartis subsidiary Sandoz, a generic drug manufacturer, is keeping secret any plans it might have to expand its presence in China with a new headquarters and a joint venture deal. A Sandoz spokesperson declined to confirm or deny plans, reported in the Chinese press over the past few weeks, to set up a China headquarters and R&D center in the western Chinese mega-city of Chongqing. Sandoz is one of the largest makers of generic medicines in the world. It already operates factories near Beijing and in China's Pearl River Delta. A new headquarters in Chongqing could help Sandoz expand in one of the globe's fastest growing generics markets. "We cannot confirm that there are any such plans for a new headquarters and R&D center in China," said Sandoz spokesperson Chris Lewis. "Sandoz remains very committed to the Chinese market, which offers considerable growth potential, and is determined to act as necessary to broaden patient access to high-quality, affordable medicines." There also have been scattered reports that Sandoz is looking to acquire Chongqing Lummy Pharmaceutical, a Chinese company with strong R&D capabilities. Yet Lewis said: "It is Group policy not to comment on market rumors or speculation." The global market for generic medicines is growing much faster than that for branded products. Low-cost generic medicines are particularly attractive for customers in developing countries. Markets in rural India and China are ideal for generics as a growing emphasis on healthcare meets cost constraints. Sandoz has been steadily expanding its sales in China. It started manufacturing in Tianjin, a port city near Beijing. In late 2007, Sandoz acquired a second manufacturing facility from Grunnenthal GmbH, a formulation factory in Zhongshan, a city in Guangdong Province, near the former British colony of Hong Kong. During the first quarter of 2009, Novartis sales dropped by 2 percent to $9.7 billion on an annual basis. Sandoz reported sales of $1.7 billion for the first quarter of 2009. Last year, Novartis posted a year-on-year rise of 29 percent in sale revenues inside China to RMB3.3 billion. Novartis leaders stated in an annual report that they expect revenue growth in the China market to hit 30 percent in 2009. Drug multinational Novartis was formed in 1996 as a result of a merger between Ciba-Geigy and Sandoz. It became a major generics player when it bought Hexal, a German company, in partnership with Eon Labs. Most of Novartis' generics business is done through Sandoz. - Alfred Romann ([email protected]) |